Kerr-McGee tried to hide environmental liabilities, lawyer argues

Anadarko Petroleum Corp.'s Kerr-McGee Corp. hid the true reason for the 2005 spinoff of Tronox - dumping billions of dollars in environmental liabilities - from its own board, a lawyer said Tuesday at the start of a $25 billion trial.

The lawsuit, brought by Tronox against Anadarko in 2009 and taken over by the Justice Department on behalf of the Environmental Protection Agency, seeks to recover $25 billion to clean up 2,772 polluted sites and compensate about 8,100 tort claimants who say they've been harmed by toxins.

David Zott, a lawyer for the U.S. and Tronox, said in opening statements that evidence will show a handful of Kerr- McGee executives tried to obscure the reason for the Tronox spinoff. He cited evidence that in May 2001, Kerr-McGee's chief financial officer deleted a reference to the company's environmental issues from a presentation to the board on why it should authorize a spinoff.

"All the way back in May 2001, they were thinking about the ultimate endgame," Zott told U.S. Bankruptcy Judge Allan Gropper.

"A tall tale well told is still a tall tale," Thomas Lotterman, a lawyer for Anadarko, said in his opening statement.